A Korean retirement pension account carries your name, but you cannot simply take money out of it. The permitted grounds are a closed list in the Enforcement Decree, and anything not on the list is not allowed. Read two provisions side by side, though, and an odd gap appears — some grounds let you pledge the account as security but not withdraw from it.
1. There are two lists. Article 2 of the Decree sets the grounds for pledging the entitlement; article 14 sets the grounds for early withdrawal. Article 14 calls only some of article 2’s items.
2. University fees, weddings and funerals appear only on the pledge list. They are item 4-2 of article 2(1), and article 14 does not call that item.
3. Medical costs carry one extra threshold. Pledging needs six months or more of treatment; withdrawing needs that and spending more than 125/1,000 of your annual wages.
This piece covers article 14, which applies to defined-contribution (DC) and individual (IRP) accounts. The interim settlement of statutory severance pay is a different provision, and we did not verify it — noted under “Where to check further” below.
Two lists, and the second one is shorter
Enforcement Decree of the Act on the Guarantee of Workers’ Retirement Benefits, article 14 (grounds for early withdrawal from a defined-contribution plan) (1) “Grounds prescribed by Presidential Decree, such as the purchase of a house” in article 22 of the Act means any of the following. <Amended 15 Dec 2015, 2 Jul 2019, 29 Oct 2019, 3 Nov 2020>
1. Where article 2(1) item 1, item 1-2 or item 5 (limited to damage from a disaster) applies
1-2. Where article 2(1) item 2 applies and the member bears medical costs exceeding 125/1,000 of their own annual wages
2. … declared bankrupt within the preceding five years
3. … granted a decision to commence individual rehabilitation within the preceding five years
4. Where a member who has pledged the entitlement and taken a loan needs to repay that loan, on grounds published by the Minister of Employment and Labor
The very first item points at another provision. It picks up only items 1, 1-2 and 5 of article 2(1). So what else does article 2 contain?
| Ground | Art. 2 pledge | Art. 14 withdraw |
|---|---|---|
| Buying a house, no other home owned (item 1) | Yes | Yes |
| Jeonse or rental deposit, no other home owned (item 1-2) | Yes | Yes |
| Medical costs, 6 months+ of treatment (item 2) | Yes | +threshold |
| Bankruptcy (within 5 years) | Yes | Yes |
| Individual rehabilitation (within 5 years) | Yes | Yes |
| University fees, wedding or funeral costs (item 4-2) | Yes | no |
| Employer suspension of business etc. (item 5) | Yes | disasters only |
The last two rows are the point of this piece.
Fees, weddings and funerals sit on the pledge list only
Same Decree, article 2 (grounds for pledging a retirement pension entitlement) (1) … means any of the following.
…
4-2. Where the member bears the university fees, wedding costs or funeral costs of any of the following
(a) the member (b) the member’s spouse (c) a dependent of the member or their spouse
The items article 14(1) calls are 1, 1-2, 5 (disasters only) and 2. Item 4-2 appears nowhere. That is what the structure says — an urgent tuition bill does not open a DC account for withdrawal; what it opens is the route of pledging the entitlement and borrowing against it.
And repaying that loan is itself a withdrawal ground (article 14(1) item 4). The amount is capped at what the repayment requires (paragraph (2)), and the case must fall within grounds published by the Minister of Employment and Labor. We did not obtain that publication.
Only medical costs carry a second threshold
Article 2(1) item 2 covers medical costs for the member, their spouse or a dependent needing six months or more of treatment. For a pledge that is enough. For a withdrawal, article 14(1) item 1-2 adds a condition — “exceeding 125/1,000 of their own annual wages”.
125/1,000 is 12.5 per cent. The threshold therefore tracks the wage.
| Annual wages | 125/1,000 | Spending must exceed |
|---|---|---|
| 30m won | 3.75m won | 3.75m won |
| 40m won | 5m won | 5m won |
| 50m won | 6.25m won | 6.25m won |
| 60m won | 7.5m won | 7.5m won |
| 80m won | 10m won | 10m won |
The arithmetic is ours — annual wages × 0.125. What is worth noticing is that the direction inverts: the higher the wage, the higher the bar. The same 8m won of medical spending clears it at 50m won of wages and fails at 80m.
The provision also borrows its definition of medical costs from another statute — article 2(1) item 2 says “medical costs under article 118-5(1) and (2) of the Enforcement Decree of the Income Tax Act”. Which outlays qualify has to be read there.
The deposit ground is “once per employer”
Article 2(1) item 1-2 Where a member who owns no house bears, for residential purposes, a jeonse deposit under article 303 of the Civil Act or a rental deposit under article 3-2 of the Housing Lease Protection Act. In this case, it is limited to one occasion while the member works at one business or workplace.
Only this item carries a frequency limit. Item 1, buying a house, has no such sentence. And the unit of the limit is “while working at one business or workplace” — neither per person nor per lifetime.
One more thing: both item 1 and item 1-2 open with “a member who owns no house”. If you own a home, neither ground applies.
The list is not in one place
| Withdrawal ground | Provision | Extra condition in the text |
|---|---|---|
| Buying a house | art. 14(1)1 → art. 2(1)1 | owns no house · in own name |
| Jeonse / rental deposit | art. 14(1)1 → art. 2(1)1-2 | owns no house · once per employer |
| Medical costs | art. 14(1)1-2 → art. 2(1)2 | 6 months+ and over 12.5% of wages |
| Disaster damage | art. 14(1)1 → art. 2(1)5 | disasters only — other cases in item 5 excluded |
| Bankruptcy / rehabilitation | art. 14(1)2 and 3 | within five years counting back |
| Repaying a pledge loan | art. 14(1)4 | published grounds + capped at the repayment |
The right-hand column is the point — matching the ground is not enough; every row adds a condition on top. In summary:
- Article 14 does not write the grounds out; it calls article 2.
- Article 2 passes the definition of medical costs to the Income Tax Act Enforcement Decree, article 118-5.
- Article 14(1) item 4 passes again, to a ministry publication.
So “can I withdraw?” has no one-sentence answer. What this piece verified stops at the two Decree provisions; the publication and the tax Decree we did not obtain. And even when a withdrawal is allowed, the tax treatment is a separate question — the structure of the lump-sum tax is in our Korean severance tax calculator. We did not verify the provisions behind the alternative rates in this piece.
Where readers usually go wrong
Does this apply to DB plans?
The heading of article 14 says “defined-contribution plan”. The provision names DC in its own title. How DB and DC differ is set out in DB versus DC. We did not check the DB position here.
Is interim settlement the same thing?
No. This piece is about early withdrawal from retirement pension savings; interim settlement of statutory severance pay is a different provision and we did not verify it. The names are close enough to be confused easily.
What happens to my years of service?
Retirement income tax turns heavily on years of service — on the same amount, shorter service costs far more. Change the service field in the severance tax calculator and the spread is immediate. How service is counted after a withdrawal, we did not check.
What about money that earned a tax credit?
Contributions that attracted a tax credit are treated differently depending on how they later come out — see pension savings and IRP tax credits and the three tiers of Korean pensions for that structure.
The savings carry your name, but the Decree decides what counts as a reason to reach them. And a reason good enough to pledge the account is not automatically good enough to empty part of it.
Sources
- Korean Law Information Center, Ministry of Government Legislation — statutory text — Enforcement Decree of the Act on the Guarantee of Workers’ Retirement Benefits, article 14. The items of paragraph (1) and the cap in paragraph (2) are transcribed from the text. This version is in force from 24 March 2026, Presidential Decree No. 36220.
- Korean Law Information Center — statutory text — the same Decree, article 2. Items 1, 1-2, 2 and 4-2 come straight from the text; the observation that article 14 does not call item 4-2 is ours, from placing the two provisions side by side.
- The threshold figures are ours — the statutory 125/1,000 applied to annual wages (30m won → 3.75m won, and so on). The Decree states a ratio, not a table of amounts.
Where to check further
- Interim settlement of statutory severance pay. Article 14 covers withdrawal from DC savings — the interim-settlement provision is published separately by the Ministry of Employment and Labor.
- The ministerial publication. Article 14(1) item 4 defers to it and we did not obtain it — check the Ministry of Employment and Labor and the Korea Workers’ Compensation and Welfare Service.
- Paperwork in practice. Even on a valid ground, what evidence is required varies by provider — ask whoever holds the account.
Written as of August 2026. The quoted provisions are the text as published by the Korean Law Information Center, and the comparison table and threshold figures are our own, from reading the two provisions against each other and applying the stated ratio. The ministerial publication, article 118-5 of the Income Tax Act Enforcement Decree and the interim-settlement provision we did not verify — so those points are left open rather than asserted. Our other everyday tools are in the calculator index.
